SRA sets talk on $875 million term loan at Libor plus 425-450 bps

By Sara Rosenberg

New York, June 20 - SRA International Inc. revealed price talk on its $875 million seven-year term loan as Libor plus 425 basis points to 450 bps with a 1.5% Libor floor and an original issue discount of 99, according to a market source.

There is 101 soft call protection for one year.

The company's $975 million senior secured credit facility (B1/B) also includes a $100 million five-year revolver.

Commitments are due on June 30.

Citigroup Global Markets Inc., Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC and Goldman Sachs & Co. are the joint lead arrangers and bookrunners on the deal, with Citigroup the left lead.

A bank meeting to launch the transaction took place last Thursday, but price talk was left as to be determined until now.

Proceeds will be used to help fund the buyout of the company by Providence Equity Partners for $31.25 in cash per share of common stock for a total value of $1.88 billion.

Other funds for the transaction will come from $415 million of senior notes, equity and shares of SRA common stock contributed by the rollover investor to the holding company immediately prior to the merger totaling about $150 million.

The notes are backed by a commitment for a $415 million senior unsecured interim loan with pricing of Libor plus 725 bps with a 1.25% Libor floor, increasing to a specified cap.

Closing is expected during the first quarter of fiscal year 2012, which begins on July 1, subject to shareholder approval and regulatory approvals.

SRA is a Fairfax, Va.-based provider of technology and strategic consulting services to government organizations and commercial clients.

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